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Akzo Nobel pleads guilty to fixing choline chloride prices

Canadian Competition Bureau probe nets $2.9 million in fines and guilty plea from Akzo Nobel Chemicals BV

August 20, 2003


The Competition Bureau announced today that, on August 18, 2003, Akzo Nobel Chemicals BV pleaded guilty in the Federal Court of Canada and was sentenced to fines totaling $2.9 million for its part in conspiracies affecting the sale of an important animal feed additive, and a chemical used in numerous commercial and consumer products.

"The Competition Bureau continues to aggressively fight international cartels," said Denyse MacKenzie, Senior Deputy Commissioner of Competition. "The conviction of Akzo demonstrates that we pursue foreign companies that enter into market sharing and price fixing agreements affecting Canadians."

Akzo Nobel Chemicals BV, a company based in the Netherlands, will pay a $1 million fine for its part in the conspiracy with respect to the sale and supply of Choline Chloride, and a $1.9 million fine for its part in the conspiracy with respect to the sale and supply of Monochloroacetic Acid and Monochloroacetate (MCAA).

These two international conspiracies involved the sale and supply of Choline Chloride, an additive widely used in the animal feed industry, and MCAA, a chemical ingredient used in numerous commercial and consumer products, such as herbicides, pulp and paper, and plastics.

The Bureau's investigation concerning Choline Chloride, which started in 1999, revealed that from 1992 to 1994, Akzo attended conspiracy meetings and encouraged a number of other companies engaged in an international conspiracy to fix prices in Canada and to allocate market shares here and abroad. As a result of this conspiracy, a very significant proportion of the Canadian market was insulated from foreign competition.

The Bureau's investigation concerning MCAA, which started in 2000, revealed that Akzo was involved in an international price fixing conspiracy from 1995 to 1999. The conspiracy agreement was designed to fix prices and allocate market shares for MCAA in Canada and elsewhere. Our investigations in this Choline Chloride and MCAA conspiracies are
ongoing.

With the Akzo guilty plea, a total of four firms have been convicted in the Bureau's Choline Chloride inquiry. The Federal Court also convicted Bioproducts Incorporated, and fined the company $600,000 for its role in the conspiracy. In September 1999, BASF AG of Germany and Chinook Group Limited of Toronto pleaded guilty and were convicted for their participation in the conspiracy. They were fined $1 million and $2.25 million, respectively. As well, a former vice-president of Chinook was sentenced to a nine-month prison term, to be served in the community, and to 50 hours of community services.

The Competition Bureau is an independent law enforcement agency which ensures that all Canadians enjoy the benefits of a fair and competitive economy, low prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act. [CNW]

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